Identity theft is a crime that victimizes people and businesses in every
community
from major cities to small towns, and robs victims of their individual
freedoms.
The Department of Justice is deeply committed to combating all forms of
identity
theft, through its use of investigative and prosecutorial resources to bring
identity thieves to justice, and its support of outreach and prevention
efforts
to protect the public from identity theft.

Bringing Identity Thieves to Justice

The Department’s identity theft prosecutions have ranged from simple
theft of financial data and documents to credit-card “skimming” operations
and high-tech “phishing” schemes and schemes to use others’ online
brokerage accounts to manipulate securities markets. As just one example
of the Department’s robust efforts to prosecute identity thieves, the
Department has made extensive use of the aggravated identity theft statute
since
it was enacted in 2004: in Fiscal Year 2006, the Department charged 507
defendants with aggravated identity theft, up from 226 defendants in Fiscal
Year 2005. Additionally, in Fiscal Year 2006, the Department charged 1945
defendants in cases involving both identity theft and aggravated identity
theft
charges, up from 1571 defendants in Fiscal Year 2005. The following cases
are just a few examples of the identity theft prosecutions brought across
the
country over the last year.

FEMA Fraud (United States v. Williams, Southern District of
Alabama)
On January 24, 2007, a defendant was sentenced to 75 months imprisonment after
pleading guilty to defrauding FEMA and aggravated identity theft following
Hurricane
Katrina. The defendant filed 28 fraudulent claims for disaster assistance
she made to FEMA and, in many of those applications, the defendant used
Social
Security numbers of other people. With the money from FEMA, the defendant
purchased
real estate, a mobile home, several vehicles, home electronics, home
furnishings,
and other goods and services. As part of her plea agreement, the defendant
agreed
to forfeit to the United States the property she obtained with the FEMA
money,
and to pay full restitution for the money she received by fraud.

“Phishing” Schemes (United States v. Dolan et al.,
District of Connecticut)
On September 20, 2006, a federal grand jury returned an indictment charging
six defendants for their participation in an elaborate Internet “phishing”
scheme
that targeted and victimized America Online (AOL) subscribers. According
to the indictment, the defendants conspired to “harvest” e-mail
addresses of AOL subscribers. The defendants then “spammed” thousands
of AOL subscribers with counterfeit e-mails purporting, for example, to
convey
an electronic greeting card. If an AOL subscriber attempted to view the
greeting card, the subscriber’s computer would be infected with a software
trojan that prevented the subscriber from accessing AOL without entering
information
including the subscriber’s name, address, Social Security account number,
credit card number, bank account number, and personal identification number.
The
defendants then used the information to produce counterfeit debit cards,
which
they used at ATM machines, online, and at retail outlets to obtain money,
goods,
and services.

Skimming (United States v. Matuzovic et al., Central District
of California)
On June 19, 2006, eight defendants were arrested for their alleged
involvement
in an identity theft ring that “skimmed” account information from
debit cards used by more than 100 diners at area restaurants, and then used
the information to steal money from the victims’ bank accounts. Federal
investigators believe the scheme resulted in the theft of more than $1
million. According
to the indictment, two of the defendants allegedly orchestrated the scheme
and
instructed complicit servers at three restaurants to steal account
information
from patrons’ debit cards. Armed with the stolen account information,
those two defendants allegedly “re-stripped” their own debit cards
with the stolen information, and then asked the banks to provide them with
new
PIN numbers for their cards. After receiving the new PIN numbers, the
defendants allegedly used the cards to deposit counterfeit checks into the
victims’ accounts
and withdraw cash.

“Hijacking” of Brokerage Accounts (United States
v. Marimuthu et al., District of Nebraska)
On March 12, 2007, two residents of India and one resident of Malaysia were
charged with conspiracy, fraud and aggravated identity theft stemming from
an
international fraud scheme designed to hijack online brokerage accounts.
According
to the indictment, the defendants hacked into online brokerage accounts of
others
using stolen usernames and passwords or established new brokerage accounts
using
stolen identities. The defendants then made scores of unauthorized purchases
of the same stocks to drive up the market price. Once the share prices were
artificially inflated, the defendants sold their own shares for a
substantial
profit. As part of this ongoing investigation, at least 60 customers and
nine brokerage firms in the United States and elsewhere have been identified
as victims, with one of the brokerage firms reporting more than $2 million
in
losses.

“Carding” (United States v. Roberts, Eastern District
of Virginia) On February 9, 2007, a defendant was sentenced to
94 months in federal prison
for aggravated identity theft, access device fraud, and conspiracy to commit
bank fraud. The defendant received e-mails or instant messages containing
hundreds
of stolen credit card numbers, usually obtained through “phishing” schemes
or network intrusions, from “vendors” who were located in Russia
and Romania. In his role as a “cashier” of these stolen credit
card numbers, the defendant then electronically encoded these numbers to
plastic
bank cards, made ATM withdrawals, and returned a portion to the vendors.
Computers
seized from the defendant revealed over 4,300 compromised account numbers
and
full identity information for more than 1,600 individual victims.

Misuse Of Social Security Numbers (United States v. Wagner,
Northern
District of California)On January 12, 2007, in connection with
the Hewlett-Packard pretexting investigation,
a defendant pleaded guilty to two identity theft-related counts. The
defendant
admitted that he was paid as part of a conspiracy that made fraudulent use
of
Social Security numbers and other confidential information to obtain the
personal
phone records of reporters and HP officials, as well as the personal records
of these individuals’ family members.

Medicare Fraud (United States v. Ferrer, Southern District of
Florida)
On January 24, 2007, a federal jury convicted a defendant in a case
involving
the theft and transfer of Medicare patient information from the Cleveland
Clinic
in Weston, Florida. The defendant purchased the patient information from a
co-defendant,
a former Cleveland Clinic employee, who pled guilty on January 12, 2007 and
testified against the defendant at trial. The theft resulted in the
submission
of more than $7 million in fraudulent Medicare claims, with approximately
$2.5
million paid to providers and suppliers.

ATM Fraud (United States v. Potupa, Southern District of New
York)
On March 14, 2007, a defendant was sentenced in absentia to 90 months in
prison
for using stolen account information to fraudulently withdraw hundreds of
thousands
of dollars from ATMs located in New York City, New Jersey, and Philadelphia.
During his fraud scheme, the defendant bought account information and
corresponding
personal identification numbers from an associate over the Internet, and
then
electronically encoded this information onto blank ATM-type cards. He then
used
these cards to withdraw cash from ATM machines and, as a result, stole or
attempted
to steal at least $960,000 between 2004 and February 16, 2006. A search
of the defendant at the time of his arrest revealed that he was carrying
approximately
50 plain, grey-colored ATM cards and approximately $7,500 in crisp twenty
dollar
bills.

Sale of Personal Information (United States
v.
Giannone, District of South Carolina) On February 8, 2007, a jury
convicted
a defendant of fraud and identity theft for selling over the internet
debit
card numbers and other personal information. The defendant was caught
in an undercover online investigation run by the United States Secret
Service. In
May, 2005, the defendant used online chat rooms to contact an individual
who had previously developed a highly recognized name among people
involved
in credit card fraud and identity theft. This individual was working
undercover with the Secret Service. Over the course of chats, the
defendant downloaded information on 29 debit card accounts to the
individual.

Bank Fraud (United States v. Nguyen et al., Western District
of Washington)
On June 2 and September 6, 2006, two defendants were sentenced to 54 months
and 78 months in prison and ordered to pay restitution in excess of $1
million
for their role in a ring that committed more than $1.6 million in bank fraud
using the stolen identities and bank account numbers of 90 different
individuals.
Using the personal information, the ringleader would obtain fake IDs and
create
phony checks. The imposters would cash or deposit the phony checks into the
accounts and then withdraw the funds, essentially raiding the accounts.

Immigration Fraud (Operation Wagon Train)
Federal identity theft charges were brought against over 140 illegal aliens
accused of stealing the identities of lawful U.S. citizens in order to gain
legal employment. Agents executed civil search warrants on December 12,
2006, at six meat processing plants owned by one of the nation’s largest
processors of fresh pork and beef. Many of the names and Social Security
numbers being used at the meat processing plants were reported stolen by
identity
theft victims to the Federal Trade Commission. In many cases, victims
indicated that they received letters from the Internal Revenue Service
demanding
back taxes for income they had not reported because it was earned by someone
working under their name. Other victims were denied driver’s licenses,
credit, or even medical services because someone had improperly used their
personal
information before.

New Account Fraud (United States v. Mored and Nissen, Western
District of Washington) According to the indictment, one of two
named
defendants was employed at a janitorial company and worked at night in a
U.S. Bank branch. He joined with other conspirators to steal
information
on more than 200 bank customers. Using that information, the two
defendants opened credit accounts in the customers names and used those
accounts to purchase expensive items such as laptop computers, flat
screen
televisions, and airline tickets. In addition, they signed up for
on-line banking for accounts that had not previously had on-line banking
and then used those accounts to pay their own bills and transfer funds
to
other checking accounts that they then drained. The indictment charged
them with more than $200,000 in fraud against dozens of victims.

Trafficking of Stolen Personal Information (United States v.
Mantovani et al., District of New Jersey) On June 28 and 29,
2006, four defendants were sentenced for their involvement
in the Shadowcrew international criminal organization. Using a Web site, the
Shadowcrew organization had thousands of members engaged in the online
trafficking
of stolen identity information and documents, such as drivers’ licenses,
passports, and Social Security cards, as well as stolen credit card, debit
card,
and bank account numbers. The Shadowcrew members trafficked in at least 1.7
million stolen credit card numbers and caused total losses in excess of $4
million
dollars. The Secret Service successfully shut down the Web site in October
2004.

Outreach and Prevention

The Office of Justice Programs (OJP) at the Justice Department provides
funding
and training for victim service programs and victim service providers at the
federal, state, local and tribal levels; funding for law enforcement’s,
prosecutors’ and crime prevention experts’ efforts to address identity
theft through the Bureau of Justice Assistance; research and program
evaluation
concerning identity theft through the National Institute of Justice; and
data
collection for policymakers on identity theft through the Bureau of Justice
Statistics. Anyone wishing to ask a question about identity theft or to
report identity theft may call 1-877-ID-THEFT, or visit http://www.ftc.gov/idtheft.
Other resources are available on the Office for Victims of Crime
identity-theft
resource Web page at http://www.ojp.usdoj.gov/ovc/publications/infores/focuson2005/identitytheft/welcome.html,
and on the Department’s identity-theft Web site at http://www.usdoj.gov/criminal/fraud/idtheft.html.